Shape the market
GAVI aims to create a strong, healthy vaccine market that generates sufficient supply of quality vaccines at low and sustainable prices for developing countries.
Change in the total cost to fully immunise a child with pentavalent, pneumococcal and rotavirus vaccines
Selected vaccine package price (US$)
The total vaccine cost of fully immunising a child with pentavalent, pneumococcal and rotavirus vaccines fell from US$ 32.97 in 2011 to US$ 22.63 in 2012.
Number of products offered as percentage of 5-year target (%)
This indicator assesses the level of interest among manufacturers to supply their products for the GAVI market in response to UNICEF tenders. More products offered by different manufacturers means healthy competition, a broader supplier base and better supply security.
Reduced vaccine prices
In 2012, the GAVI Alliance helped to lay the foundations for greater market certainty, reduced vaccine prices and improved supply security.
GAVI, through UNICEF, issued four new tenders in 2012 – two more than in 2011. The tenders were for human papillomavirus (HPV), pentavalent, pneumococcal and measles-containing vaccines.
In 2012, GAVI began buying the bulk of its rotavirus vaccines at the new, lower price of US$ 2.50 per dose. This is a two-thirds reduction compared with the previous lowest price offer, and will allow developing countries and GAVI to prevent more future deaths at the same cost.
During the year, GAVI started procuring pentavalent vaccines from a new manufacturer, Biological E (Bio-E), based in India. This brings the total number of suppliers offering prequalified pentavalent vaccines to four.
Expanding the supplier base still further for key vaccines is important to ensure long-term supply security.
Market shaping in action
Market shaping in action
Compared with generic drugs, vaccines are more difficult to manufacture and require significantly greater investment both in terms of money and time. As a consequence, there are fewer producers, higher barriers for new manufacturers to enter the market and less scope for price reductions.
GAVI has found that a proactive approach to market shaping is necessary to ensure the most favourable conditions for the world’s poorest countries. GAVI’s supply and procurement strategy, adopted in 2011, aims to secure sufficient supply of appropriate, quality vaccines for all GAVI-supported countries, to keep the cost of vaccines as low as possible, and to foster an environment for innovation. A fourth objective is to communicate timely, transparent and accurate market information to manufacturers and countries.
Although vaccine market shaping is a long-term process, the Alliance has had some significant impact on the market. By bundling demand from more than 70 developing countries and providing greater market certainty, GAVI has helped to reduce prices, speed up the delivery of life-saving vaccines and attract new manufacturers to the market.
Through the implementation of a demand forecasting tool and by sharing market information in a transparent and timely manner, Alliance partners are enabling countries to make more informed decisions about vaccines and manufacturers to plan their production more effectively.
GAVI has also contributed to strengthening the national regulatory capacity in supported countries, and to the development of global norms and standards for vaccines. The Bill & Melinda Gates Foundation has been a critical partner in designing and implementing market innovations to help minimise prices and strengthen supply security.
Expanding the supplier base
Since the early days of GAVI, the number of manufacturers supplying GAVI-funded vaccines has increased significantly. In 2001, GAVI purchased vaccines from just five manufacturers, of which only one was based in a developing country. By 2012, this had increased to 10, including 4 based in middle-income countries.
Roadmaps to guide GAVI’s market-shaping efforts
Vaccine roadmaps are a fundamental part of GAVI’s approach to shaping vaccine markets. They set out the Alliance’s long-term ambition for each vaccine, both those it is currently funding and those it plans to support in the future.
Each roadmap gives an overview of the dynamics of a particular vaccine market. It comprises an analysis of current and future products available, product characteristics, cost and price drivers, a prioritisation of GAVI’s objectives and options for how to achieve them, and a time frame for GAVI’s engagement.
GAVI relies on an array of procurement and market-shaping tools, the use of which depends on the characteristics of each market. For example, by prepaying a portion of the vaccine supply or extending the deal period, and thereby providing manufacturers with increased certainty, GAVI may encourage manufacturers to offer vaccines at more competitive prices. Providing a long-term view of the market can help to enlarge the supplier base and encourage new suppliers to enter the market.
By the end of the year, GAVI had finished its first vaccine market roadmap – for HPV vaccines – which was used to inform the procurement of the vaccine in 2013. Roadmaps for all other vaccines are under development.
Women deliver Expanding
Making vaccines affordable
Making vaccines more affordable for developing countries
In recent years, GAVI Alliance partners, particularly the Bill & Melinda Gates Foundation, have helped to drive down the prices of some of the key vaccines used by developing countries. For instance, the weighted average price of pentavalent vaccine fell from US$ 3.61 per dose in 2007 to US$ 2.17 in 2012 – a drop of 40%. In the same period, the number of manufacturers that GAVI purchased the vaccine from increased from 2 to 4.
Significant price reductions have also been secured for the rotavirus vaccine, bringing the cost down from approximately US$ 15 to just US$ 5 per course, or US$ 2.50 per dose. This will have an expected market impact valued at US$ 650 million.
The Alliance opened a new funding window for HPV vaccine in April 2012. During the year, the GAVI Secretariat worked with vaccine manufacturers to secure price commitments for the vaccine of less than US$ 5 per dose, or US$ 15 per course.
The cost of fully immunising a child with pentavalent, pneumococcal and rotavirus vaccines fell from US$ 32.97 in 2011 to US$ 22.63 in 2012, representing a saving of more than US$ 10 per immunised child.
introduces rotavirus vaccines procured at lower price
In the waiting room of the Al-Zahrawi Health Centre, parents discuss the new vaccine against rotavirus, a common cause of deadly diarrhoea throughout Yemen. The health centre is located close to a market, and many families bring their children to be immunised after shopping.
Yemen is the first country in the Middle East to introduce rotavirus vaccine with GAVI support. Rotavirus kills more than 5,000 Yemeni children under the age of five annually, and 40% of all children hospitalised for diarrhoea have rotavirus.
In 2012, GAVI announced that it will buy most of its rotavirus vaccine doses at a cost of US$ 5 per course. This is 97% lower than the US private market price and a third of the lowest price offered to public institutions worldwide.
By pooling demand and bulk buying vaccines, GAVI maximises the value of its donor contributions and increases the ability of countries to sustain vaccine programmes.
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